[3-B] Sources and uses of funds
— Current year and previous month vs. current month —
This report, like its name indicates, allows us to appreciate in the last month as well as in the last 12 months, the Sources and uses of funds, adding the effect of the Operating working capital in the last 12 months and during the last month, with it's attention calls.
When we receive this information along with the auditor's opinion, generally fourth months after the year end have passes, which is of little use to take decisions.
This report is highly important because we can see clearly where the resources came from and what was done with them, not just from one month to the next, but from the previous year to the current one.
The presentation in two columns makes easier to see the concepts.
For our example, the resources generated have been applied to the Accounts receivable (507), to the Inventories (1,009), and to pay the Accounts payable (420), then the alarm in the Operating working capital is turned on by the increase of 1,936 in the last twelve months and is also reflected in an increase of 128 in the last month.
We can see the Sources and uses of the current year in the next graph.